2008 (4) TMI 558 - AT - Customs

Summary

Issues: Misdeclaration of imported goods as Vanaspati Ghee, Confiscation of goods under Customs Act, Imposition of fine and penalty, Permission for re-export without payment of fine.

Misdeclaration of Imported Goods as Vanaspati Ghee:
The appellant imported goods declared as "HYDROGENATED VEGETABLE OIL (VANASPATI GHEE)" from Sri Lanka under Customs Notification No. 26/2000. The Port Health Officer found the goods adulterated as the melting point did not meet the prescribed standard for Vanaspati. The Central Food Laboratory (CFL) confirmed the non-conformity to Vanaspati standards. The lower authorities held the goods liable for confiscation under Section 111(d) of the Customs Act and imposed a penalty under Section 112(a) on the importer. The appellant argued that misdeclaration did not occur as the goods were described based on the supplier's invoice. However, the Bench differentiated the case from precedent, emphasizing the specific standards for Vanaspati under the Prevention of Food Adulteration Rules. The CFL report showed the sample did not meet the required Sesame oil content and Baudouin test standards, justifying the confiscation.

Confiscation of Goods under Customs Act:
The appellate tribunal upheld the lower authorities' decision to confiscate the goods and impose a penalty based on the non-compliance with Vanaspati standards. The appellant's plea for re-export without fine payment was rejected, citing precedent that redemption fine applies regardless of the goods' destination. The misdeclaration rendered the goods confiscable under Section 111(d) of the Customs Act, warranting the penalty under Section 112.

Imposition of Fine and Penalty:
The original authority imposed a fine of Rs. 4.5 lakhs for redemption and a penalty of Rs. 2.25 lakhs on the importer. The tribunal, considering the circumstances, reduced the fine to Rs. 1.5 lakhs and the penalty to Rs. 50,000. The fine, initially around 30% of the goods' value, was deemed excessive and adjusted accordingly. With the modified amounts, the tribunal upheld the lower authorities' orders and dismissed the appeal.

Permission for Re-export without Payment of Fine:
The appellant's request to re-export the goods without paying the fine was refuted, citing that misdeclaration warranted confiscation and penalty under the Customs Act. The tribunal maintained that the redemption fine was necessary to address the confiscation order, regardless of whether the goods were intended for home consumption or re-export.